Gift of residuary estate

Your residuary estate is anything left in your estate that you have not already specifically dealt with elsewhere in your will.

If you have dealt with the majority of your estate in cash gifts, gifts of assets and personal possessions and gifts to charities, there may not be very much left in your residuary estate. But it is still important to include a residuary beneficiary so that anything you have missed can be distributed according to your wishes; otherwise it would be distributed according to the intestacy rules.

Alternatively, if you are leaving only a few, or no, specific or cash gifts in your will, then most or all of your estate will be distributed in accordance with the gift of residuary estate clause in your will.

The interview allows you to select from a number of options of who you would like your residuary estate to pass to your death. The options that appear depend on your status. For example, if you are married with children, options relating to your spouse and children will appear.

(Note, however, that if you have decided to leave your home to your spouse or civil partner for their lifetime, the option to include your spouse or civil partner as a residuary beneficiary will not appear. If you still want them to share in your residuary estate, then special drafting will be required. You should seek expert legal advice from one of our panel firms.)

The options

Broadly the options can be divided into:

  • gifts to specific beneficiaries (e.g. your spouse/civil partner, one specific named beneficiary, your children/grandchildren, a class of beneficiaries (e.g. siblings, nieces and nephews etc); and
  • a discretionary trust for a wide range of beneficiaries.

You can choose a combination of these – for example, one specific beneficiary and then a discretionary trust.

Some of the options refer to making a gift to one person or group and "then" another. This means that if the first one can't inherit, then the next one will do so. For example, "Your spouse then other beneficiaries" means that your spouse would receive the whole estate, but if he/she had already died, it would go to other beneficiaries that you would specify.

If you choose a gift to one specific beneficiary (e.g. your spouse, civil partner or a named individual), you will then be asked whether you would like your residuary estate to pass outright to this person or for them to be entitled only to the income from your residuary estate. Choose income if you want them to enjoy the assets in your estate for the rest of their lives, with whatever is left passing to other beneficiaries on their death.

The Bequeathed will does not allow you to have as a residuary beneficiary any person to whom you are leaving a life interest in property. If you want an arrangement like that you need to seek expert legal advice from one of our panel firms.

For more information, see our page Residuary estate.

Gift to children and grandchildren

If you choose to pass your residuary estate to your children and/or grandchildren (either as the primary beneficiaries of the estate or in the event that the primary beneficiary (e.g. your spouse or civil partner) does not survive you), you will need to decide at what age you would like them to inherit the assets.

The options are age 18, 21 or 25. There may be inheritance tax consequences of keeping assets in trust beyond the age of 18.

Discretionary trust

If you don’t want to decide now exactly how your residuary estate will be divided when you die, you may choose a discretionary trust. This is the most flexible sort of trust that you can create in your will but it also has the highest inheritance tax charge attached to it.

For more information, see our page Discretionary will trust.

The interview will ask you who is going to be able to benefit from the discretionary trust (e.g. your spouse, civil partner, specific individuals, your children/grandchildren, charities etc).

Default gift

If you have chosen to leave your residuary estate to specific beneficiaries, the interview will ask you who you would like to receive your assets if none of your first choice of beneficiaries survive you.

You can choose:

  • a specific beneficiary;
  • specific beneficiaries in equal shares; or
  • a class of beneficiaries (e.g. siblings, nieces and nephews etc).

The Bequeathed will does not allow you to have as a default beneficiary any person to whom you are leaving a life interest in property. If you want an arrangement like that you need to seek expert legal advice from one of our panel firms.

For more information, see our page Default gifts.

Ultimate default gift

Your will automatically includes an ultimate default gift in favour of charities. This clause will only ever take effect if all of the other beneficiaries you have named to inherit your residuary estate die before you. This gift will avoid your will failing and your estate then being distributed according to the intestacy rules.

For more information, see our page Default gifts.